Published: August 6, 2014 at 3:20 pm

Walgreen Company (NYSE:WAG) has announced that it would no longer pursue a tax haven outside the U.S. as it was widely expected. Instead, the company will only continue with its total acquisition of the British drug chain Alliance Boots, but will keep its main office in the States. Although the decision to drop the inversion opportunity comes as a disappointment for some of the company’s investors who favored a move to reincorporate abroad, the CEO Gregory D. Wasson has defended their change of heart about inversion, as The New York Times reported.

The CEO was quoted as saying that they have evaluated the issue of taking their tax offices outside the U.S., but it dawned on them that doing so was not going to be of benefit to the shareholders in the long-run. For example, they looked at the financial benefits of such move and also at the public reaction on their denouncement of the U.S. corporate citizenship. According to Wasson, Walgreen Company (NYSE:WAG) is an iconic American company and beyond that it gets most of its revenue from government-backed reimbursement programs.

“The company concluded it was not in the best long-term interest of our shareholders to attempt to re-domicile outside the U.S,” Wasson was quoted as saying.

Furthermore, given the increased scrutiny of inversion deals as U.S. lawmakers seek to impose some regulations, it would have required Walgreen Company (NYSE:WAG) to enter into a renegotiated deal with Alliance Boots, something that the company was not prepared to do. It will now move forward with the purchase of the 45% stake in Alliance that it doesn’t already own. It will pay $5.27 billion seal the deal.

“[…] with this decision, we are now moving forward on an accelerated basis to create the global leader in pharmacy-led health and well-being,” Wasson added concerning the deal with Alliance Boots.

This latest development will most likely disappoint the shareholders of Walgreen Company (NYSE:WAG) who have been urging the company to move its headquarters in order to reduce its tax bill. Among the shareholders are Andreas Halvorsen’s Viking Global, which owns more than 24.11 million shares, followed by Jana Partners, managed by Barry Rosenstein, which owns about 12.15 million shares, held as of the end of the first quarter.

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